Board of Directors Vs Advisory Board

While both can assist an organization achieve new heights, the primary distinction between a board of directors and an advisory board is their legal responsibilities. An advisory board is a great tool for nonprofits to connect to the community and offer their opinions and perspectives.

An advisory board doesn’t have the same legal responsibilities or fiduciary obligations as a regular board of directors, meaning that they are not able to make financial decisions on behalf of an organisation. This is why it’s important to ensure that both the advisory board and board of directors are aware of the purpose of an advisory board and also the limits of its role.

This is especially crucial in the case of organizations that refer to both groups as the “board.” By providing a written explanation of the role of an advisory board via a resolution of the board for instance it is possible to ensure that the members of the advisory board don’t accidentally start acting like a board of directors. This is a problem not just because of liability issues, but also because it could cause confusion and anger for both the advisory Board Member board and the board of directors.

An advisory board that is well-established can be a great source for a non-profit organisation, and it’s imperative that everyone involved is aware of what their role is. By making sure there’s distinct distinction between an advisory board and a regular board, organizations can minimize the risk of confusion, avoid potential missteps, and retain talent.